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The End of the Free Internet?
We Won’t Like It, but the Internet May Not Remain a Free Enterprise
by Reid Goldsborough

Link-Up Digital
May 15, 2006

One of the key reasons the Internet has succeeded as it has is that, aside from getting onto it, it’s largely free. But with its success have come more and more efforts to capitalize on it, from private enterprise to the government. More changes loom ahead.

Among the biggest players online is America Online, and it recently made the controversial move of giving large e-mailers preferential treatment by paying a fee to http://www.goodmailsystems.com.

This has people in an uproar for a number of reasons.

One concern is that AOL’s move will increase junk e-mail, already a huge time-wasting, productivity-sapping problem. Another concern is that AOL is creating an unfair two-tier e-mail system that will leave large companies able to pay to bypass AOL’s malfunctioning spam filters and small businesses, nonprofit organizations, and individuals unable to reach many intended recipients. A third concern is that if AOL succeeds with its project, everybody will eventually have to pay to be assured of fast and reliable e-mail.

In response, hundreds of small businesses and nonprofit organizations have teamed together to create the DearAOL.com Coalition (http://www.dearaol.com), applying pressure on AOL, Yahoo!, and other Internet service providers to stop or reject such pay-to-send schemes. Among the members of the coalition are the liberal MoveOn.org and the conservative RightMarch.com political action committees.

Nefariously, AOL temporarily blocked e-mails sent to its subscribers that mentioned the DearAOL.com Coalition before being pressured into stopping this. AOL has also described its use of the CertifiedEmail service as giving its subscribers more choice and more safety and that it’s “a good thing for the Internet, not bad.”

Pay-to-send e-mail isn’t a new concept—Microsoft talked about it a decade ago. It has finally arrived. Whether it succeeds will depend partly on individual users like you and me and whether our voices will be heard. AOL isn’t the only way to access the Internet, and if subscribers don’t like its policies, they can always move on.

Companies are eyeing other basic Internet services for profits along with e-mail. Telecommunications and cable companies have proposed schemes to offer preferential treatment to Web sites in the transmission of their data packets, for a fee. This “packet prioritization” would enable those sites to be faster and more responsive than other sites.

Critics charge that this also will give an unfair advantage to large companies and will hurt small businesses, nonprofits, and individuals.

Consumer groups and Internet companies such as Google and Amazon.com oppose packet prioritization. As Congress considers legislation that would rewrite the country’s telecommunications laws, these organizations are lobbying for “Net neutrality,” also called “network neutrality.”

Other companies that feel they can benefit from packet prioritization are lobbying to keep the legal framework as it is. Individuals can join in the lobbying effort too by letting their elected representatives know how they feel. Faxes are more effective than e-mail, and old-fashioned mailed letters are more effective than faxes. FreePress (http://www.freepress.net) is a group that lobbies for “more democratic media.”

Other Internet revenue-generating initiatives involve state governments seeking to increase their sales-tax revenues. The growth of Internet commerce over the past decade has resulted not only from the convenience of online shopping but also from the absence of sales tax on Web purchases. More and more states are stepping up efforts, however, to force residents to pay a “use tax” on merchandise bought over the Internet.

New York has added a line to state income-tax returns instructing residents to determine what they owe for Web, mail-order, and out-of-state purchases or face the possibility of a fine. California is telling residents through banner ads at in-state newspaper Web sites that they may owe use taxes for online purchases.

More than 40 states are participating in the Streamlined Sales Tax Project (http://www.streamlinedsalestax.org), which is attempting to simplify state sales and uses tax codes and make the collection of sales and use taxes mandatory for out-of-state sellers. It receives funding from the National Governors Association and other organizations.

NetChoice (http://www.netchoice.org) is a coalition of e-commerce companies such as Yahoo! and eBay that opposes Internet use and sales taxes. Avalara (http://www.avalara.com) is a company seeking to benefit from this; it offers software to e-commerce sites that calculates the sales tax customers owe on Internet purchases.

As the Internet becomes ever more integrated into the fabric of our society, it will become ever more like other sectors of the economy. The days of a collaborative network run by academic and hobbyist volunteers are over.


Reid Goldsborough is a syndicated columnist and author of the book Straight Talk About the Information Superhighway . He can be reached at reidgold@comcast.net or http://www.reidgoldsborough.com.

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